ERICSSON (LM) TEL-SP ADR (ERIC) Stock Fundamental Analysis
USA - NASDAQ:ERIC - US2948216088 - ADR
9.72 USD
-0.13 (-1.32%)
9.72 USD
0 (0%)
Taking everything into account, ERIC scores 6 out of 10 in our fundamental rating. ERIC was compared to 48 industry peers in the Communications Equipment industry. While ERIC has a great profitability rating, there are some minor concerns on its financial health. ERIC is valued quite cheap, while showing a decent growth score. This is a good combination! ERIC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERIC was profitable.
In the past year ERIC had a positive cash flow from operations.
Of the past 5 years ERIC 4 years were profitable.
In the past 5 years ERIC always reported a positive cash flow from operatings.
1.2 Ratios
ERIC's Return On Assets of 8.72% is amongst the best of the industry. ERIC outperforms 85.42% of its industry peers.
ERIC has a better Return On Equity (24.01%) than 89.58% of its industry peers.
ERIC's Return On Invested Capital of 15.20% is amongst the best of the industry. ERIC outperforms 89.58% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERIC is below the industry average of 13.10%.
The 3 year average ROIC (10.59%) for ERIC is below the current ROIC(15.20%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 15.2% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
1.3 Margins
Looking at the Profit Margin, with a value of 10.26%, ERIC belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
ERIC's Profit Margin has declined in the last couple of years.
The Operating Margin of ERIC (12.97%) is better than 81.25% of its industry peers.
In the last couple of years the Operating Margin of ERIC has grown nicely.
ERIC has a better Gross Margin (47.62%) than 62.50% of its industry peers.
ERIC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% |
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ERIC is creating value.
Compared to 1 year ago, ERIC has about the same amount of shares outstanding.
ERIC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ERIC has been reduced compared to a year ago.
2.2 Solvency
ERIC has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
ERIC has a Debt to FCF ratio of 1.45. This is in the better half of the industry: ERIC outperforms 72.92% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERIC is not too dependend on debt financing.
The Debt to Equity ratio of ERIC (0.35) is worse than 64.58% of its industry peers.
Even though the debt/equity ratio score it not favorable for ERIC, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.27
WACC6.71%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERIC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.17, ERIC is not doing good in the industry: 81.25% of the companies in the same industry are doing better.
A Quick Ratio of 0.94 indicates that ERIC may have some problems paying its short term obligations.
The Quick ratio of ERIC (0.94) is worse than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
ERIC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 541.12%, which is quite impressive.
ERIC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
The Revenue has decreased by -2.65% in the past year.
ERIC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.76% yearly.
EPS 1Y (TTM)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
3.2 Future
The Earnings Per Share is expected to grow by 30.26% on average over the next years. This is a very strong growth
ERIC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.91% yearly.
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.80, the valuation of ERIC can be described as reasonable.
ERIC's Price/Earnings ratio is rather cheap when compared to the industry. ERIC is cheaper than 93.75% of the companies in the same industry.
ERIC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.89.
A Price/Forward Earnings ratio of 13.82 indicates a correct valuation of ERIC.
83.33% of the companies in the same industry are more expensive than ERIC, based on the Price/Forward Earnings ratio.
ERIC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.8 | ||
| Fwd PE | 13.82 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERIC is valued cheaper than 91.67% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERIC indicates a rather cheap valuation: ERIC is cheaper than 91.67% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.03 | ||
| EV/EBITDA | 7.19 |
4.3 Compensation for Growth
ERIC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ERIC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ERIC's earnings are expected to grow with 59.26% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y96.63%
EPS Next 3Y59.26%
5. Dividend
5.1 Amount
ERIC has a Yearly Dividend Yield of 3.03%.
Compared to an average industry Dividend Yield of 3.21, ERIC pays a better dividend. On top of this ERIC pays more dividend than 89.58% of the companies listed in the same industry.
ERIC's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
5.2 History
On average, the dividend of ERIC grows each year by 22.02%, which is quite nice.
ERIC has paid a dividend for at least 10 years, which is a reliable track record.
ERIC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)22.02%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
37.84% of the earnings are spent on dividend by ERIC. This is a low number and sustainable payout ratio.
The dividend of ERIC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
9.72
-0.13 (-1.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners54.97%
Inst Owner Change-1.59%
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap32.40B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target9.25 (-4.84%)
Short Float %1.05%
Short Ratio2.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
Yearly Dividend0.28
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)49.11%
Min EPS beat(2)20.62%
Max EPS beat(2)77.6%
EPS beat(4)3
Avg EPS beat(4)34.33%
Min EPS beat(4)-10.72%
Max EPS beat(4)77.6%
EPS beat(8)6
Avg EPS beat(8)-29.88%
EPS beat(12)9
Avg EPS beat(12)-11.71%
EPS beat(16)10
Avg EPS beat(16)-8.77%
Revenue beat(2)0
Avg Revenue beat(2)-3.63%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-0.88%
Revenue beat(4)0
Avg Revenue beat(4)-2.46%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.5%
Revenue beat(16)7
Avg Revenue beat(16)-0.68%
PT rev (1m)9.42%
PT rev (3m)12.34%
EPS NQ rev (1m)14.05%
EPS NQ rev (3m)14.39%
EPS NY rev (1m)20.5%
EPS NY rev (3m)22.29%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.8 | ||
| Fwd PE | 13.82 | ||
| P/S | 1.27 | ||
| P/FCF | 10.03 | ||
| P/OCF | 8.98 | ||
| P/B | 2.97 | ||
| P/tB | 6.8 | ||
| EV/EBITDA | 7.19 |
EPS(TTM)0.9
EY9.26%
EPS(NY)0.7
Fwd EY7.23%
FCF(TTM)0.97
FCFY9.97%
OCF(TTM)1.08
OCFY11.13%
SpS7.66
BVpS3.27
TBVpS1.43
PEG (NY)0.03
PEG (5Y)N/A
Graham Number8.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 19.24% | ||
| ROIC | 15.2% | ||
| ROICexc | 22.2% | ||
| ROICexgc | 46.36% | ||
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% | ||
| FCFM | 12.65% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
ROICexc(3y)14.83%
ROICexc(5y)17.86%
ROICexgc(3y)47.09%
ROICexgc(5y)43.4%
ROCE(3y)13.4%
ROCE(5y)15.43%
ROICexgc growth 3Y9.12%
ROICexgc growth 5Y7.91%
ROICexc growth 3Y-8.84%
ROICexc growth 5Y4.9%
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.87 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 13.31 | ||
| Cash Conversion | 83.18% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.71%
ROIC/WACC2.27
Cap/Depr(3y)47.04%
Cap/Depr(5y)51.35%
Cap/Sales(3y)1.94%
Cap/Sales(5y)2.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y15.06%
FCF growth 1Y392.6%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y169.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%
ERICSSON (LM) TEL-SP ADR / ERIC FAQ
What is the fundamental rating for ERIC stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERIC.
Can you provide the valuation status for ERICSSON (LM) TEL-SP ADR?
ChartMill assigns a valuation rating of 9 / 10 to ERICSSON (LM) TEL-SP ADR (ERIC). This can be considered as Undervalued.
How profitable is ERICSSON (LM) TEL-SP ADR (ERIC) stock?
ERICSSON (LM) TEL-SP ADR (ERIC) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for ERIC stock?
The Price/Earnings (PE) ratio for ERICSSON (LM) TEL-SP ADR (ERIC) is 10.8 and the Price/Book (PB) ratio is 2.97.
Can you provide the financial health for ERIC stock?
The financial health rating of ERICSSON (LM) TEL-SP ADR (ERIC) is 4 / 10.